DGSE Companies, Inc. Announces Letter of Intent for Accretive Acquisition of Pawn Businesses
July 06 2017 - 4:01PM
Business Wire
DGSE Companies, Inc. (NYSE MKT:DGSE) (“DGSE” or the
“Company”), a leading wholesaler and retailer of jewelry, diamonds,
fine watches, and precious metal bullion and rare coin products,
today announced that it has entered into a non-binding Letter
of Intent to acquire the equity interests in National Pawn, Inc.
(“National”) and its related affiliates. No definitive agreement
has been reached, and there can be no assurance that a definitive
agreement will be reached. DGSE’s Board of Directors’ approval is
required in order to enter into such definitive agreement.
If a definitive agreement is reached, this acquisition would be
expected to close in the 3rd quarter of 2017. DGSE expects the
acquisition to bring promising revenue and earnings accretion to
shareholders going forward.
National and its affiliates have a 27-store footprint, including
stores in Arizona, North Carolina, Oklahoma and Texas. National is
based in Austin, Texas. It was founded in 1993 by its current CEO,
Courtland (Corky) L. Logue, Jr. (“Logue”). Logue has a long history
in founding and operating pawnshops, including EZPAWN and EZCORP
(NASDAQ: EZPW).
“We continue to explore new opportunities and agreements with
potential partners who are excited about being a part of DGSE’s
future. We believe this positions DGSE to generate an attractive,
total shareholder return over the long term,” stated John Loftus,
DGSE’s President, Chairman and Chief Executive Officer.
Elemetal Recycling Update.
As announced on April 19, 2017, DGSE has also entered into a
non-binding Letter of Intent to acquire certain tangible
personal-property assets of Elemetal Recycling, LLC from Elemetal,
LLC. This transaction is progressing well, with DGSE working to
complete requisite due diligence, financing and a definitive
agreement.
Profits and Retail-Operations
Update.
DGSE expects to post a profit in the second quarter of 2017 and
show continued operational improvement, though there is still much
to be done to build the business to its full potential and maximize
shareholder value. DGSE anticipates getting smarter with each
customer interaction, educating its sales staff on customers’
preferred products.
DGSE anticipates divesting its wholesale division Fairchild
International and associated website, www.fairchildwatches.com, in
the near term. The Company seeks to streamline its operations,
focusing its fine-watch marketing and business in the retail
sector. This retail concentration also provides an opportunity to
earn the loyalty of more customers, strengthen our market position,
and contribute to a winning strategy for our business going
forward.
DGSE wholesales and retails jewelry, diamonds, fine watches, and
precious metal bullion and rare coin products through its
Charleston Gold & Diamond Exchange and Dallas Gold & Silver
Exchange operations. In addition to its retail facilities in South
Carolina and Texas, the Company operates websites which can be
accessed at www.dgse.com and www.cgdeinc.com. The Company is
headquartered in Dallas, Texas, and its common stock trades on the
NYSE MKT exchange under the symbol “DGSE.”
This press release includes statements that may constitute
“forward-looking” statements, including statements regarding the
potential acquisitions of National and Elemetal Recycling, and
entering into definitive agreements regarding the potential
acquisitions. These statements are made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements inherently involve risks and
uncertainties that could cause actual results to differ materially
from the forward-looking statements. Factors that would cause or
contribute to such differences include, but are not limited to,
negotiations regarding a definitive agreement, market conditions,
and other risks detailed in the Company's periodic report filings
with the Securities and Exchange Commission. By making these
forward-looking statements, the Company undertakes no obligation to
update these statements for revisions or changes after the date of
this release except as required by law.
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version on businesswire.com: http://www.businesswire.com/news/home/20170706006149/en/
DGSE Companies,Inc.Bret Pedersen,
972-587-4024bpedersen@dgse.com
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